AGM 2014

[dcollon]

Thanks for posting

[gfp]

I thought the question regarding Mid American and it's returns on capital was a good one, but I wish Warren had elaborated a bit more.  Even though Warren boasts about the huge amount of CapEx being reinvested at MidAmerican operating earnings have increased from $1,846mm in 2009 to $2,102mm for 2013 (A 3.3% annual increase).  Warren seems very excited about the business because they are getting 10%+ returns on capital.  Just wish he could explain why it's not showing up in operating profit.

 

 

There is a detailed investor presentation for MidAmerican (BRK Energy) at this link.  There is a slide that shows ROE of each of the energy subsidiaries and some discussion of capital expenditures vs cash flows.  You can also see MidAmerican's tax rate declining to 7% or so from closer to 20% earlier as the tax credits come online.  I think there is a substantial lag between investments and the resulting cash flows.  They are also earning below the allowed ROEs at all the subs (obviously not over).  A lot of the behavior is to show the regulators what a great owner BRK energy is for regulated assets so they will be able to buy whatever they want going forward.

 

http://www.sec.gov/Archives/edgar/data/1081316/000108131614000014/ic2014.htm

 

(side note - I tried to find some Topaz Solar Farms LLC bonds to see the yields since they are BBB, but could not find any available.  Anyone know the yields on those?)

[jrunner]

Thanks for posting your notes!

[JBird]

 

First set of notes on BRK 2014 AGM

 

https://www.dropbox.com/s/1tppq56xkbha4lj/Berkshire%20Hathaway%20annual%20meeting%20notes%205-3-2014.pdf

 

Thanks so much

[Liberty]

http://basehitinvesting.com/some-thoughts-on-the-berkshire-hathaway-annual-meeting/

 

(sorry if this has already been posted)

[Kiltacular]

Really good notes -- thanks.

 

Does anyone know an easy way to the get the Fed meeting notes from 2007 and 2008 that Buffett mentions?

 

On related note, I get the feeling they think that interest rates may stay pretty low for a long time -- Hoisington / Bradstreet to be vindicated.

 

But, the funny part about it is that playing that likelihood -- if you think it is high -- is better done buying utilities and rails than bonds.

[Guest longinvestor]

I thought the question regarding Mid American and it's returns on capital was a good one, but I wish Warren had elaborated a bit more.  Even though Warren boasts about the huge amount of CapEx being reinvested at MidAmerican operating earnings have increased from $1,846mm in 2009 to $2,102mm for 2013 (A 3.3% annual increase).  Warren seems very excited about the business because they are getting 10%+ returns on capital.  Just wish he could explain why it's not showing up in operating profit.

 

 

There is a detailed investor presentation for MidAmerican (BRK Energy) at this link.  There is a slide that shows ROE of each of the energy subsidiaries and some discussion of capital expenditures vs cash flows.  You can also see MidAmerican's tax rate declining to 7% or so from closer to 20% earlier as the tax credits come online.  I think there is a substantial lag between investments and the resulting cash flows.  They are also earning below the allowed ROEs at all the subs (obviously not over).  A lot of the behavior is to show the regulators what a great owner BRK energy is for regulated assets so they will be able to buy whatever they want going forward.

 

http://www.sec.gov/Archives/edgar/data/1081316/000108131614000014/ic2014.htm

 

(side note - I tried to find some Topaz Solar Farms LLC bonds to see the yields since they are BBB, but could not find any available.  Anyone know the yields on those?)

 

Thanks for posting this. Yes, WEB takes every opportunity to point out that there will be more and more acquisitions in energy (and never breathe a word about other deals). Going by their comments, other utilities are unable to invest as much capital to receive tax credits. WEB points out in this year's letter that MidAmerican retains All their earnings. This can happen only at Berkshire and it can go on for years. The all-in wager on America will continue, why not? Folks that are doing forensic analysis, looking for 3 or 5 year returns on capital investments in MidAmerican are missing the point.

 

What is the NPV of these growing, future tax credits?

 

[VersaillesinNY]

 

Really good notes -- thanks.

 

Does anyone know an easy way to the get the Fed meeting notes from 2007 and 2008 that Buffett mentions?

 

On related note, I get the feeling they think that interest rates may stay pretty low for a long time -- Hoisington / Bradstreet to be vindicated.

 

But, the funny part about it is that playing that likelihood -- if you think it is high -- is better done buying utilities and rails than bonds.

 

WEB might have mentioned these notes:

 

http://www.federalreserve.gov/monetarypolicy/files/FOMC20081007confcall.pdf

[redskin]

I thought the question regarding Mid American and it's returns on capital was a good one, but I wish Warren had elaborated a bit more.  Even though Warren boasts about the huge amount of CapEx being reinvested at MidAmerican operating earnings have increased from $1,846mm in 2009 to $2,102mm for 2013 (A 3.3% annual increase).  Warren seems very excited about the business because they are getting 10%+ returns on capital.  Just wish he could explain why it's not showing up in operating profit.

 

 

There is a detailed investor presentation for MidAmerican (BRK Energy) at this link.  There is a slide that shows ROE of each of the energy subsidiaries and some discussion of capital expenditures vs cash flows.  You can also see MidAmerican's tax rate declining to 7% or so from closer to 20% earlier as the tax credits come online.  I think there is a substantial lag between investments and the resulting cash flows.  They are also earning below the allowed ROEs at all the subs (obviously not over).  A lot of the behavior is to show the regulators what a great owner BRK energy is for regulated assets so they will be able to buy whatever they want going forward.

 

http://www.sec.gov/Archives/edgar/data/1081316/000108131614000014/ic2014.htm

 

(side note - I tried to find some Topaz Solar Farms LLC bonds to see the yields since they are BBB, but could not find any available.  Anyone know the yields on those?)

 

Thank you!

[Kiltacular]

 

Really good notes -- thanks.

 

Does anyone know an easy way to the get the Fed meeting notes from 2007 and 2008 that Buffett mentions?

 

On related note, I get the feeling they think that interest rates may stay pretty low for a long time -- Hoisington / Bradstreet to be vindicated.

 

But, the funny part about it is that playing that likelihood -- if you think it is high -- is better done buying utilities and rails than bonds.

 

WEB might have mentioned these notes:

 

http://www.federalreserve.gov/monetarypolicy/files/FOMC20081007confcall.pdf

 

Awesome...thanks!

[Guest longinvestor]

 

First set of notes on BRK 2014 AGM

 

https://www.dropbox.com/s/1tppq56xkbha4lj/Berkshire%20Hathaway%20annual%20meeting%20notes%205-3-2014.pdf

 

The highlight of the meeting was captured by Munger's thoughts on Omaha's relationship with the subsidiaries,

 

CM: By the standards of the rest of the world, we over trust.  And our results have been better because of the selective way we have chosen people to over trust.  I think cultures work better when there is a strong measure of trust.  And this internal accounting system of controls culture that people are developing is going to make things worse

 

interesting to keep an eye on this during any transition and how they work in the 3G kind of deals. CM/WEB said that they are all "learning" as we speak.